Algeria, the Sleeping Giant of North Africa

Peace & Security,Sahel Watch04 Nov 2015Dalia Ghanem-Yazbeck

Four years after the wave of upheavals that shook the Middle East and North African (MENA) region, the Algerian regime has been able to maintain itself and ensure relative stability in its territory. After a long isolation because of the ‘black decade’ (1991–2000), the country seems to be back in the game and is playing a key role in the stability of North Africa and the Sahel region. Algeria has undeniable assets that could enable it to become North Africa’s regional power, but its deep political and socioeconomic woes are a real constraint on its ambition to become a regional power.

The resurgence of Algeria as a power in a troubled region has been extensive. In Mali, it played a significant role during the French military operation Serval (2012-2014), even though it did not contribute any ground troops. In addition to opening its air space to the French, the Algerian military sealed its borders with Mali to prevent armed Islamist groups from withdrawing and cut off their sources of funding. The country also played an important mediation role in the inter-Malian dialogue between the Malian government and the political-military movements of Northern Mali. In Libya, Algiers leveraged its diplomatic connections to facilitate dialogue between the disagreeing Libyan parties, while in Tunisia, it pressed for a dialogue between Nidaa Tounes and the Islamists of Ennahda. But even though the country clearly has ambitions as a regional power it will need to capitalize on its assets before such ambitions can become an enduring reality.

Algeria’s potential

Four factors clearly outline Algeria’s future potential: the country’s geographic qualities, its demographic makeup, its oil wealth, and its modern and experienced security sector. Algeria is the largest country in the Arab world, Africa and the Mediterranean basin. Its 1,200 km coastline gives it a strategic continental location in the hub of the Maghreb. Due to its geographic proximity and colonial legacy, Algeria is a privileged partner of France and, by extension, of the European Union. Algeria is also a demographic power with a total population of 39,542,166, of which nearly 67% are under 30 and approximately 30% are 15–29 years of age. The enrolment rate for primary education is 95% and for secondary education is above 60%. The working age population in Algeria constitutes nearly 68% of the total population. This number signifies the large potential for youth to increase GDP growth and raise national production and consumption.

The country is also a key supplier of oil and gas to the West, with the third largest conventional oil reserves (12.2 billion barrels) in Africa, and the 10th biggest gas reserves (4.5 trillion cubic metres) in the world. Throughout the past decade, Algeria was able to take advantage of high international oil and gas prices to provide a comfortable financial cushion. In 2013, Algeria’s foreign exchange reserves stood at US$201 billion. The revenue from hydrocarbon exports has been used to sustain steady economic growth. In the past three years, the country’s economy has grown at an average annual rate of 3%. Thanks to its newfound wealth, Algeria was also able to pay off nearly all of its external debt, which now stands at 2% of GDP.

Finally, Algeria has a strong and modern military. The People’s National Army (PNA) has an active frontline force of 512,000 and an active reserve force of 400,000. According to a 2014 SIPRI report, Algeria became the first weapon buyer in Africa with military spending exceeding US$10 billion, which represents an increase of 176% since 2004. Algeria is also among the world’s top 10 buyers, moving up in ranking from 24th in 2011 to 6th in 2013. Algeria is also developing its domestic military manufacturing industry by forming joint ventures with firms from several countries: In 2011, three commercial vehicle plants were commissioned by Aabar Investments Fund in the UAE, and Daimler, MTU Friedrichshafen and Deutsch AG in Germany; in the same year, an agreement was reached with Serbian Yugoimport to build three production plants for small arms and ammunition for a total of US$400 million. In January 2015, Algeria revealed the first locally-assembled Mercedes-Benz Ztros six-wheel drive military truck.

Key to regional stability

Although Algerian security forces have largely succeeded in preventing armed Islamist groups from returning, highly-localized and sporadic terrorist activity has continued to challenge Algeria’s security. The most recent example of this was the ambush on an army convoy in Ain Defla in northern Algeria on 8 July 2015.

The rising instability in neighbouring Libya – where armed militias and terrorist groups have mushroomed since the collapse of the Gaddafi regime in 2011 – has led to an increase in weapons and drug traffic at the borders. In fact, these groups have been strengthening their networks by searching for regional allies, as showed by the coalition formed between Mokhtar Bel Mokhtar and the Movement for Unity and Jihad in West Africa (MUJAO). The latter attacked gendarmerie barracks in Tamenrasset and Ouergla in 2012. These regional alliances were also evidenced by the 2013 terrorist attack on the In Amenas gas facility by Mokhtar Bel Mokhtar and his international commandos. This spectacular attack in Southern Algeria, in which 70 people died, is evidence of the links and interrelations between various terrorist groups in Algeria, Tunisia, Mali and Libya, from which the attack was launched.

For these reasons, Algerian authorities see Tunisia as a shield from the ongoing chaos in Libya. However, because of its contiguity to Algeria’s northern coast and massifs, Tunisia is also a great cause for concern. Since 2013, Algerian security agencies have shared expertise, equipment and intelligence to assist its Tunisia with counterterrorism, border security and customs. The PNA has also positioned tens of thousands of soldiers along the borders with Libya, Tunisia, Mali and Niger to contain the spill over of arms and terrorists.

This modernization went together with improvements in the training of armed forces. The PNA has provided different services with quality training on the use of sophisticated equipment and in counterterrorism operations, as revealed in several issues of the PNA official magazine, El Djeich. In addition, Algeria’s military forces have sophisticated training and extensive experience in counterterrorist tactics obtained during the Islamist insurgency in the 1990s, which drove the country into a bitter civil war causing some 150,000 fatalities. Despite highly localized and sporadic terrorist attacks against military barracks, the Algerian security forces have succeeded in preventing armed Islamist groups from re-emerging. The PNA is backed in its counterterrorism and counter-smuggling operations by various corps such as the Special Forces, the Para-Commando Regiments, the Military Police, the Special Intervention Detachment, the Department of Intelligence and Security (DRS), as well as the National Gendarmerie and the Special Units of the Directorate General of National Security (DGSN).

A fragile stability in an unstable region

Although Algeria did not witness the widespread civil unrest of the Arab uprisings, dissatisfaction simmers under the surface nonetheless. Spontaneous riots occur regularly across the country each year. In the first half of 2015 alone, Algeria’s police (DGSN) recorded 6,200 local protests. Protests often revolve around hogra (injustice) in the attribution of social housing, state jobs or funds, and rising prices. Protests have remained local and state officials diffuse tensions using handouts.

Despite the state subsidizing everything from food to fuel, this form of unrest exposes the limitations of Algeria’s subsidy regime in resolving deep-rooted issues such as unemployment, whose primary victims are the youth. In 2015, the unemployment rate for those aged 16–25 reached 25%. The vast majority of the population suffers from poverty (10 million people live beneath the poverty line), high cost of living (between 1989 and 2003 the average salary dropped by 20%), and housing shortages (deficit of 1.6 million units), among other problems. Infrastructure, especially in health and education, cannot meet the needs of the constantly increasing population (Algeria has a birth rate of 25.14%).

These problems, in addition to widespread corruption and lack of transparency, have pushed many urban and rural youth to consider applying for a visa to France, England or Canada for a better job, wages and living conditions. The urge to leave the country is so strong that some are ready to die at sea. Since 2004, hundreds of youth have put their lives in jeopardy and migrated illegally to Europe by crossing the Mediterranean Sea, a phenomenon known as the haraga (literally: the ones who burn the frontiers).

A country in need of economic and political reform

Successive governments have not undertaken the necessary reforms to move away from an economy dependent on hydrocarbon exports for growth and a business environment dominated by the state. This has left the country vulnerable to external shocks and the recent decline in international oil and gas prices have already begun to affect the state’s finances. According to the Algerian Central Bank, Algeria’s foreign exchanges dipped from US$178 to US$159 billion between December 2014 and June 2015. In addition, a burdensome bureaucracy and a distrust of the private sector has weaken the country’s economy and made it incapable of absorbing the vast number of young people looking for jobs.

On the political front, the country has been stuck in a state of permanent transition because of the military’s predominance. As prominent historian of Algerian politics Mohamed Harbi once said: ‘Every state has its army. The Algerian army, however, has its state’. Officially, Algeria is a Republic with a strong presidency, but, in practice, any presidential initiative must be approved by the military. Fifty-three years after independence, the military is still prevailing over the state. Over the span of 15 years, President Bouteflika made no real structural reforms. Recent changes made by the president to the main security branch are mostly cosmetic – nothing that could threaten the military and its security apparatus. Despite the different factions within the institution and enmities with the political establishment, the Algerian military knows how to act cohesively to further their own advantage and interests. Accordingly, it backed Bouteflika’s fourth mandate, most likely to buy time to find the ‘ideal’ candidate for his succession.

This political blockage has discouraged the establishment of an active civil society and a real opposition that could serve as a counterweight to the ruling authority. However, the 2012 revised regulations on political parties and association (see original here in French), and those on media and information, which were initiated after the Arab Spring, caused the proliferation of poorly organized and volatile parties (as early as April 2012, 44 new parties were allowed to participate in the elections of 10 May 2012) and associations (around 92,000 organizations are registered). This hodgepodge of parties and associations has prevented the consolidation of the opposition and prevent it from establishing a unified strategy.

What is the way forward for Algeria?

Algeria has undeniable assets that could enable it to become a regional power. It is already a key player in the inter-Libyan dialogue – reaching a peace agreement without Algeria would be nearly impossible. It is also a major player in the fight against terrorism in the region. This North African country represents the last bulwark against the terrorist and violent extremist groups that are spreading in Tunisia, Libya and Mali. But the only way for Algeria to be stable as well as politically and economically sustainable is to push for real, rather than aesthetic, economic and political reforms.

On the economic level, the government should initiate structural reforms to move away from a ‘rentier’ economic model towards a diversified and self-sustaining economy. In addition, freeing up the operating environment for local businesses and foreign investors will strengthen the economy’s resilience to external shocks and generate sustainable job creation. On the political level, a generational renewal within Algeria’s political establishment would undoubtedly reinvigorate the country’s institutions.

Addressing the youth’s political and economic aspirations will be vital to the country’s stability in the coming years. The state must realize that governance is not its exclusive responsibility. There is an urgent need to empower civil society to fully and freely participate in the democratic process (e.g. by amending the new Organic Law 06.12, which threatens freedom of assembly). More importantly, after five decades of military supremacy, there is a critical need to review civil-military relationships. Civilian control of the security establishment and security forces is necessary for Algeria’s transition to a ‘real’ democracy. It is only then, that the country can truly come into its role as a regional giant.